Selling a Business in Munich

Under German law (GmbHG §15), any transfer of GmbH shares must be notarised by a German Notar. This is a mandatory procedural requirement with no equivalent in most other jurisdictions. The Notar reads the entire share purchase agreement aloud at the signing ceremony — a process that can take several hours for a mid-market transaction. Both buyer and seller must be present or represented by proxy. This requirement needs to be planned for in advance, as Notar availability and the lead time to prepare the notarisation documents can affect transaction timelines. Palmstone coordinates this process for every German transaction we advise on.

A significant proportion of Munich and Bavarian mid-market M&A is driven by family business succession — owners in their 60s and 70s who have not identified a next-generation successor within the family and are exploring external sale as the preferred exit route. Buyers understand this dynamic and generally approach Bavarian family business transactions with sensitivity to the seller's concern for employee continuity and business preservation. For sellers, understanding this buyer psychology — and selecting buyers who share those values — is often as important as maximising headline price.

Munich businesses consistently command higher multiples than equivalent businesses in other German cities. This premium reflects the city's GDP per capita (highest in Germany), the quality of its Mittelstand, and the depth of the buyer pool — both German strategics and international acquirers specifically seek Munich-based targets. For sellers, this is a genuine competitive advantage, but it also means that Munich buyers are sophisticated and will rigorously scrutinise earnings quality, growth trajectory, and management depth before committing to a premium valuation.

Bavarian businesses with more than five employees can establish a Betriebsrat, and many mid-market Munich businesses have active works councils. Under the BetrVG, the works council must be informed and consulted before any significant operational change — including a business transfer — though it does not hold a veto right over the transaction itself. International buyers unfamiliar with German co-determination law sometimes underestimate the importance of managing this process carefully. A poorly handled works council consultation can create significant post-close integration difficulties.